Germany's largest power producer by capacity also said it would decommission more unprofitable power plants and terminate unfavorable electricity purchase agreements with an aggregated capacity of around 1,500 megawatts. Other European utilities have also announced the shutdown or mothballing of unprofitable power plants, including rivals E. ON SE and France's GDF Suez SA.

"Conventional power generation is losing ground, not just at RWE," said Chief Executive Peter Terium.

He reiterated previous calls for the German government to set up a so-called capacity market, in which power plant operators receive cash for keeping generation capacity available to help guarantee uninterrupted power supply. Mr. Terium noted that intermittent renewable energies still "contribute little" to security of supply and require backup facilities such as coal and gas-fired power plants. Other European countries where power supply is tighter than in Germany, such as the U.K., have already set up such capacity mechanisms.

Despite the poor operating performance, the company's first-half net profit rose since impairment charges on the company's fleet of power plants in the Netherlands had burdened last year's results. In the six months through June net profit climbed 4.6% to EUR1.02 billion ($1.36 billion) from EUR979 million a year earlier, Essen-based RWE said.

Recurrent after-tax profit, the net profit figure that excludes one-time items, fell 62% to EUR749 million from EUR1.99 billion. Analysts expected the company to post a recurrent post-tax profit of EUR786 million.

RWE also said that its upstream oil and gas unit Dea has now been booked as discontinued operations, which further reduced operating results. The move comes after an agreement earlier this year to sell the unit for around EUR5 billion to a group of Russian investors, led by billionaire Mikhail Fridman. The sale is expected to close at the end of the year, RWE said.

RWE said it still expects 2014 operating profit of between EUR3.9 billon to EUR4.3 billion. That would be a 34% decline from the EUR5.9 billion it posted in 2013. Recurrent after-tax profit will decline to between EUR1.2 billion and EUR1.4 billion, which would be down 48% from the EUR2.3 billion recorded last year.

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